Aave Advances in Recovery Plan for rsETH Incident

Aave has announced the second phase of its technical recovery plan for the rsETH incident. According to Foresight News, the plan, initially revealed on April 28, has made significant progress on Ethereum Core and Arbitrum. By May 6, Aave successfully liquidated eight Aave V3 positions held by the perpetrator, recovering rsETH collateral, which has been transferred to the Recovery Guardian as per AIP, with no impact on other users. Governance proposals from Mantle DAO and Arbitrum DAO have been approved, with the latter agreeing to return $71 million in ETH recovered by the Security Council to Aave for the DeFi United joint recovery effort. Additionally, a court order has permitted Arbitrum DAO to transfer frozen ETH to Aave LLC through on-chain voting, pending a final ruling. As a temporary measure, the team has borrowed additional funds to cover the shortfall, ensuring users are not affected by delays. On Arbitrum, the liquidated rsETH will be destroyed, with KelpDAO simultaneously destroying the corresponding LayerZero cross-chain message package. On Ethereum, the seized rsETH will be moved to a bridge lockbox, supplemented by ETH pledged by the DeFi United alliance. Subsequently, rsETH withdrawals will reopen, and protocol parameters temporarily adjusted for liquidation will be reverted. Remaining affected positions will be closed using raised funds in ETH. A compensation query tool is now available for users impacted by the rsETH incident to check their expected compensation amounts.